Nebraska Uniform Commercial Code 2-201

UCC 2-201

2-201.

Formal requirements; statute of frauds.

(1) Except as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his or her authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

(2)(a) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within ten days after it is received.

(b) Between a merchant and a buyer or seller of grain not a merchant, if (i) the contract is an oral contract for the sale of grain, (ii) within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received, (iii) the party receiving it has reason to know its contents, (iv) it contains a statement of the kind of grain, quantity of grain, per unit price, date of contract, and delivery date of the grain, and (v) notice appears on the face of the written confirmation stating that the contract will be enforceable according to the terms contained in the confirmation unless written notice of objection is given within ten days, the writing satisfies the requirements of subsection (1) of this section against the party receiving it unless written notice of objection to its contents is given within ten days after it is received.

(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable

(a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

(b) if the party against whom enforcement is sought admits in his or her pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or

(c) with respect to goods for which payment has been made and accepted or which have been received and accepted (section 2-606).

Source

Laws 1963, c. 544, Art. II, § 2-201, p. 1711;

Laws 1983, LB 188, § 1.

Annotations

1. Applicability of section

2. Sufficiency of writing

3. Part performance

4. Sale between merchants

1. Applicability of section

This statute does not apply to agreements for the performance of a service. Professional Recruiters v. Oliver, 226 Neb. 16, 409 N.W.2d 304 (1987).

A distributorship agreement for the sale of newspapers for a price greater than five hundred dollars was within the statute of frauds. Omaha World-Herald Co. v. Nielsen, 220 Neb. 294, 369 N.W.2d 631 (1985).

Motion of defendants for summary judgment was properly sustained where claimed contract for sale of grain was for much more than five hundred dollars, it was not in writing, there was no written confirmation, and none of the exceptions enumerated in the statute applied. Farmland Service Coop, Inc. v. Klein, 196 Neb. 538, 244 N.W.2d 86 (1976).

Agreement is bargain of parties as found in their language or by implication from other circumstances including course of dealing or usage of trade. Crane Co. v. Roberts Supply Co., 196 Neb. 67, 241 N.W.2d 516 (1976).

Under this section, seller was not equitably estopped from asserting statute of frauds as defense to breach of contract action by buyer, which alleged that seller's counterclaim for feed sold and delivered on open account constituted a clear admission that an oral contract existed within meaning of Nebraska statute of frauds, which provides that an oral contract is enforceable if party against whom enforcement is sought admits in his pleading, testimony, or otherwise in court that contract for sale was made. Golden Plains Feedlot, Inc. v. Great Western Sugar Co., 588 F.Supp. 985 (D.S.D. 1984).

2. Sufficiency of writing

An agreement for the purchase of a truck for more than $500 that is not signed by the party against whom enforcement is sought is unenforceable unless one of the limited exceptions set forth in this section is present. Woodhouse Ford v. Laflan, 268 Neb. 722, 687 N.W.2d 672 (2004).

The fact that there was no evidence of any oral or written agreement to purchase a truck that had a purchase price of more than $500 is sufficient to establish the absence of a purchase agreement that conforms to this section. Woodhouse Ford v. Laflan, 268 Neb. 722, 687 N.W.2d 672 (2004).

Several writings can be pieced together to satisfy the writing requirement of the Statute of Frauds, even though the writings taken alone would not have been sufficient. An admission within the meaning of this section can be made when the party denying the existence of the contract and relying on the statute takes the stand and, without admitting explicitly that a contract was made, testifies to facts which as a matter of law establish that a contract was formed. A compelled or involuntary admission of the existence of an oral contract, obtained during cross-examination at trial, may be relied upon to satisfy this section. The statutory requirement can be satisfied by way of pleadings, bills of particulars, depositions, affidavits, admissions pursuant to notices to admit, and oral testimony, including admissions made on cross-examination. An admission is not necessarily made whenever a party utters the magic words contract or agreement. If a party denying the existence of a contract uses contractual terminology, the court should look at the other evidence presented. An admission can be established through verbal admission and conduct. Nebraska Builders Prod. Co. v. Industrial Erectors, 239 Neb. 744, 478 N.W.2d 257 (1992).

A writing is not insufficient because it omits or incorrectly states a term agreed upon, but the contract is not enforceable beyond the quantity of goods shown in such writing. In re Estate of Nelsen, 209 Neb. 730, 311 N.W.2d 508 (1981).

Where written confirmation of an oral contract was received more than six months after the oral contract was made, receipt was not made within a reasonable time and the oral contract is not enforceable. Kimball County Grain Coop. v. Yung, 200 Neb. 233, 263 N.W.2d 818 (1978).

3. Part performance

Part performance of an oral contract for the sale of goods that is capable of apportionment is enforceable only as to that portion that has been either fully or partially performed. In re Estate of Nelsen, 209 Neb. 730, 311 N.W.2d 508 (1981).

Under statute of frauds as embodied in U.C.C., buyer by making a part payment and seller by accepting that part payment, make an enforceable contract only as to that portion of goods that could have been purchased by that part payment. In re Augustin Bros. Co., 460 F.2d 376 (8th Cir. 1972).

4. Sale between merchants

Experienced grain farmers who regularly grow and market grain on the open market as the principal means of providing for their livelihood and by reason of such occupation have acquired and possess knowledge or skill peculiar to the practices and operations of grain marketing are merchants within the meaning of section 2-104 and this section. Agrex, Inc. v. Schrant, 221 Neb. 604, 379 N.W.2d 751 (1986).

Changes: Completely rephrased; restricted to sale of goods. See also sections 1-206, 8-319, and 9-203.

Purposes of Changes:

The changed phraseology of this section is intended to make it clear that:

1. The required writing need not contain all the material terms of the contract and such material terms as are stated need not be precisely stated. All that is required is that the writing afford a basis for believing that the offered oral evidence rests on a real transaction. It may be written in lead pencil on a scratch pad. It need not indicate which party is the buyer and which the seller. The only term which must appear is the quantity term which need not be accurately stated but recovery is limited to the amount stated. The price, time and place of payment or delivery, the general quality of the goods, or any particular warranties may all be omitted.

Special emphasis must be placed on the permissibility of omitting the price term in view of the insistence of some courts on the express inclusion of this term even where the parties have contracted on the basis of a published price list. In many valid contracts for sale the parties do not mention the price in express terms, the buyer being bound to pay and the seller to accept a reasonable price which the trier of fact may well be trusted to determine. Again, frequently the price is not mentioned since the parties have based their agreement on a price list or catalogue known to both of them and this list serves as an efficient safeguard against perjury. Finally, "market" prices and valuations that are current in the vicinity constitute a similar check. Thus if the price is not stated in the memorandum it can normally be supplied without danger of fraud. Of course if the "price" consists of goods rather than money the quantity of goods must be stated.

Only three definite and invariable requirements as to the memorandum are made by this subsection. First, it must evidence a contract for the sale of goods; second, it must be "signed", a word which includes any authentication which identifies the party to be charged; and third, it must specify a quantity.

2. "Partial performance" as a substitute for the required memorandum can validate the contract only for the goods which have been accepted or for which payment has been made and accepted.

Receipt and acceptance either of goods or of the price constitutes an unambiguous overt admission by both parties that a contract actually exists. If the court can make a just apportionment, therefor, the agreed price of any goods actually delivered can be recovered without a writing or, if the price has been paid, the seller can be forced to deliver an apportionable part of the goods. The overt actions of the parties make admissible evidence of the other terms of the contract necessary to a just apportionment. This is true even though the actions of the parties are not in themselves inconsistent with a different transaction such as a consignment for resale or a mere loan of money.

Part performance by the buyer requires the delivery of something by him or her that is accepted by the seller as such performance. Thus, part payment may be made by money or check, accepted by the seller. If the agreed price consists of goods or services, then they must also have been delivered and accepted.

3. Between merchants, failure to answer a written confirmation of a contract within ten days of receipt is tantamount to a writing under subsection (2) and is sufficient against both parties under subsection (1). The only effect, however, is to take away from the party who fails to answer the defense of the statute of frauds; the burden of persuading the trier of fact that a contract was in fact made orally prior to the written confirmation is unaffected. Compare the effect of a failure to reply under section 2-207.

4. Failure to satisfy the requirements of this section does not render the contract void for all purposes, but merely prevents it from being judicially enforced in favor of a party to the contract. For example, a buyer who takes possession of goods as provided in an oral contract which the seller has not meanwhile repudiated, is not a trespasser. Nor would the statute of frauds provisions of this section be a defense to a third person who wrongfully induces a party to refuse to perform an oral contract, even though the injured party cannot maintain an action for damages against the party so refusing to perform.

5. The requirement of "signing" is discussed in the comment to section 1-201.

6. It is not necessary that the writing be delivered to anybody. It need not be signed or authenticated by both parties but it is, of course, not sufficient against one who has not signed it. Prior to a dispute no one can determine which party's signing of the memorandum may be necessary but from the time of contracting each party should be aware that to him or her it is signing by the other which is important.

7. If the making of a contract is admitted in court, either in a written pleading, by stipulation or by oral statement before the court, no additional writing is necessary for protection against fraud. Under this section it is no longer possible to admit the contract in court and still treat the statute as a defense. However, the contract is not thus conclusively established. The admission so made by a party is itself evidential against him or her of the truth of the facts so admitted and of nothing more; as against the other party, it is not evidential at all.